The cost of lockdown to the hospitality biz

Our sanity wasn't the only price paid for lengthy lockdowns. Here's why the hospitality biz has been hit hardest by COVID-19.

It’s no secret that one of the industries hit hardest by lockdown restrictions is hospitality. Home-bound Aussies mean empty restaurants, bare bars and desolate cafés.

Last year, Melbourne – arguably the heart of Australia’s hospitality scene – was hit with a whopping 112-day lockdown that saw hospitality venues closed to the public, leaving takeaway and online sales the only viable options for businesses and employees wanting to earn a living. That’s excluding the four lockdowns the state has already clocked in 2021…

Unfortunately, Melbourne isn’t alone when it comes to shuttered shops. The entire nation entered lockdown in early 2020, and since then most states have suffered through their own variations of harsh restrictions, including Brisbane and Sydney who this year have endured their fair share of paused economies.

Aside from the crippling lack of foot traffic, there are a number of other costly consequences to lockdowns that have been felt across the country.

Lost profits

Every day that a hospitality venue is forced to close because of lockdown, they lose cold hard cash. Even if they’re able to quickly pivot to a temporary takeaway service or ‘essential’ grocer-style offering, a portion of profits is lost that’s impossible to recoup with COVID-19 restrictions in place.

In the case of long-term lockdowns, business owners have been given more time to adapt. However, according to the results of a Westpac survey, while almost half (44%) of Aussie SMEs have changed their business model to adapt to financial disruption caused by the COVID-19 pandemic, only 5% of food and beverage businesses were able to move online, proving just how hard hit the biz has been.

This lost profit means also lost staff, lost livings and lost business opportunities.

Business closures

Not only is the forced closure of an eatery a travesty in itself but it’s a loss felt by the entire local food scene. Walk up a street in any metropolitan city today and you’ll see more boarded up doors than dachshunds. This a tragic reality of the pressures put on business owners in Australia’s hospitality scene during the pandemic, forcing them to scrounge to cover wages, rent, utilities and produce costs, all without the firm promise of relaxed restrictions.

But the effects of business closures don’t end with those directly involved. For every business forced to shut its doors, the surrounding eateries suffer, too. No patrons to one business, means lost foot traffic to those surrounding it. In the long-run, it also means our vibrant food scene loses a beloved little tile in its colourful cultural mosaic.

Redundancies

Casual workers are the heart and soul of the hospitality industry. They give it the passion, freshness and flexibility it’s known for. But they were also the first to feel the pain of the pandemic, working for an industry that never achieved its ‘essential business’ status.

Even when the tail end of 2020 saw 78% of the job vacancies lost since March recovered again, and GDP take a much needed upward turn, hospitality workers were still down 64,000.

Food wastage

While us mere mortals paid the price for the extended lockdowns (often with our sanity), it’s the food and beverage industry that paid the ultimate price for the snap lockdowns. $30 million worth of fresh produce to be exact was dumped in Victoria’s snap five-day Valentine’s lockdown earlier this year. A lockdown that was also said to cost the entire industry a whopping $100 million in overall revenue.

Venues did their best to remain agile in the wake of the announcement, offering ‘romantic at-home feed me menus’ where feasible, but the bulk of what was ordered ahead of the loved-up weekend was – tragically – abandoned to the bin.

Heyo! Payo’s here to help

We may be a fresh brand but payo is a team of hospo veterans. We live and breathe the industry, so we can empathise with the pain caused by recent months. But it’s also why we’re proud to put payo in the palms of hungry Australians –  because bite-by-bite, we’re reawakening our country’s appetite for eating out, and helping to rebuild the local businesses we love.

We understand that money is tight now – for venues and patrons alike. So, by giving people the chance to eat now and pay later, we’re doing our bit to take the financial pressure off our customers, and put more bums on seats in local businesses.

Ready to add your venue’s name to the long list of local bars and eateries in Brisbane, Melbourne, and Sydney? Join us at the table (and on the app!) by enquiring here.

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